Quick Takeaways
- Auto PLI scheme beneficiary base expands to 18 companies by FY27, signalling faster localisation and EV manufacturing scale-up in India.
- Stronger enforcement and rising payouts indicate the scheme is moving from capacity build-up to measurable production outcomes.
On Wednesday, the government announced that three additional vehicle manufacturers and five auto component makers will begin receiving benefits under the auto PLI scheme incentives from FY27 onwards. With these additions, the total number of beneficiaries under the scheme will rise from the current 10 to 18 companies by the end of FY27, according to the Ministry of Heavy Industries.
The auto PLI scheme incentives were approved by the Union Cabinet on September 15, 2021, with a total financial outlay of ₹25,938 crore spread over five years. The scheme attracted applications from 115 companies, out of which 82 vehicle and auto component manufacturers were approved to participate based on eligibility and investment commitments.
During a media briefing, officials stated that bank guarantees of 10 approved companies will be invoked after these firms failed to make any investment over the last two consecutive financial years. All the affected entities belong to the auto component manufacturing segment and did not deploy any capital despite securing approval under the scheme.
Under the auto PLI framework, participating companies are required to submit bank guarantees as part of compliance. If a company records zero investment for two consecutive years, the government is authorised to invoke these guarantees in line with scheme guidelines. This enforcement action is being taken to ensure accountability and timely execution of committed investments.
Disbursement under the auto PLI scheme incentives has accelerated gradually over the years. The Ministry of Heavy Industries released ₹2.63 crore in FY24 and ₹325.37 crore in FY25. In FY26, disbursements have already reached nearly ₹2,000 crore out of the ₹2,091.26 crore sanctioned for the full financial year.
Officials explained that lower payouts during the initial years were expected, as approved companies were focused on setting up manufacturing capacity and achieving domestic value addition levels above 50 percent, which is a mandatory eligibility condition to qualify for incentive claims under the scheme.
In the coming financial year, sanctioned incentives are expected to rise sharply as more manufacturers begin selling vehicles compliant with domestic value addition norms and formally start availing auto PLI scheme incentives across eligible product categories.
During FY26, five vehicle manufacturers and four auto component makers have received or are in the process of receiving incentives under the scheme. This phase reflects increasing maturity of manufacturing operations and higher localisation across electric and advanced automotive technologies.
One approved auto component manufacturer that received incentives in FY25 has opted not to claim benefits during FY26 but is expected to resume participation from FY27, as per the ministry’s update.
From FY27 onwards, three more vehicle manufacturers and five additional auto component companies are expected to start availing benefits under the auto PLI scheme incentives. This expansion signals broader industry participation and reflects growing confidence in India’s domestic automotive manufacturing ecosystem.
Under the scheme so far, incentives have supported production of:
These figures highlight the increasing impact of the auto PLI scheme incentives on India’s electric mobility and advanced automotive manufacturing landscape.
The auto PLI scheme incentives were approved by the Union Cabinet on September 15, 2021, with a total financial outlay of ₹25,938 crore spread over five years. The scheme attracted applications from 115 companies, out of which 82 vehicle and auto component manufacturers were approved to participate based on eligibility and investment commitments.
During a media briefing, officials stated that bank guarantees of 10 approved companies will be invoked after these firms failed to make any investment over the last two consecutive financial years. All the affected entities belong to the auto component manufacturing segment and did not deploy any capital despite securing approval under the scheme.
Under the auto PLI framework, participating companies are required to submit bank guarantees as part of compliance. If a company records zero investment for two consecutive years, the government is authorised to invoke these guarantees in line with scheme guidelines. This enforcement action is being taken to ensure accountability and timely execution of committed investments.
Disbursement under the auto PLI scheme incentives has accelerated gradually over the years. The Ministry of Heavy Industries released ₹2.63 crore in FY24 and ₹325.37 crore in FY25. In FY26, disbursements have already reached nearly ₹2,000 crore out of the ₹2,091.26 crore sanctioned for the full financial year.
Officials explained that lower payouts during the initial years were expected, as approved companies were focused on setting up manufacturing capacity and achieving domestic value addition levels above 50 percent, which is a mandatory eligibility condition to qualify for incentive claims under the scheme.
In the coming financial year, sanctioned incentives are expected to rise sharply as more manufacturers begin selling vehicles compliant with domestic value addition norms and formally start availing auto PLI scheme incentives across eligible product categories.
During FY26, five vehicle manufacturers and four auto component makers have received or are in the process of receiving incentives under the scheme. This phase reflects increasing maturity of manufacturing operations and higher localisation across electric and advanced automotive technologies.
One approved auto component manufacturer that received incentives in FY25 has opted not to claim benefits during FY26 but is expected to resume participation from FY27, as per the ministry’s update.
From FY27 onwards, three more vehicle manufacturers and five additional auto component companies are expected to start availing benefits under the auto PLI scheme incentives. This expansion signals broader industry participation and reflects growing confidence in India’s domestic automotive manufacturing ecosystem.
Under the scheme so far, incentives have supported production of:
- Over 1.042 million electric two-wheelers
- 238,385 electric three-wheelers
- 79,540 electric four-wheelers
- 1,391 electric buses
These figures highlight the increasing impact of the auto PLI scheme incentives on India’s electric mobility and advanced automotive manufacturing landscape.
Industry reports & Public disclosures | GAI Analysis
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